Vanke shares decline on upped impairment buffer
The annual net profit of Hong Kong-listed COFCO Meat Holdings Ltd jumped by 530.8 percent year-onyear to 950 million yuan ($138.18 million) in 2016, thanks to the decline in China’s population of sows and the rising price of hogs, the company announced on Monday.
COFCO Meat, a subsidiary of China National Cereals, Oils and Foodstuffs Corp — the country’s biggest food trader by sales revenue — said an improvement in hog production efficiency helped lower costs and production volumes rose by 540,000 heads year-on-year.
Ma Jianping, chairman of COFCO Meat, said the company planned to raise annual hog production capacity from 3.5 million at the end of 2016 to 5.5 million in 2020.
“In late 2016, China’s sow stocks remained at its lowest level in the past eight years while hog stocks were also at a low level, which should provide strong support for hog prices in 2017,” Ma said.
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and Hong Kong stock exchanges, respectively, on Monday.
In 2016, housing sales across the country reached a record high. But, there are worries behind all this prosperity, Zhu Xu, Vanke’s board secretary, told a media conference on Monday. Her comments followed the company’s 2016 results release the day before.
The move to expand its asset impairment provision covers 13 projects in 12 cities, including two second-tier cities and the remaining in third- and fourth-tier cities.
Sun Jia, executive vicepresident and chief financial officer of Vanke, noted the projected loss of some risk items is based on the company’s prudent financial strategy. The new impairment provision this year totaled about 840 million yuan.
The company announced on Sunday that its 2016 reve- percent nue amounted to 240.4 billion yuan, up by 23 percent over the previous year. Its profit attributable to equity shareholders rose by 16 percent to 21 billion yuan.
Vanke remains one of the largest companies in its sector, as it realized a total sales area of 27.65 million square meters, amounting to 364.77 billion yuan, last year.
The growth in impairment provisions is a prudent financial measure and in itself does not imply that the company is adopting a pessimistic attitude over the market, said Yan Yuejin, research director with E-house China R&D Institute.
But, Yan admitted home purchase restrictions will require property companies to adjust related projects. In other words, the pressure to achieve their sales targets has intensified.
Since the end of February, approximately a dozen cities — including Beijing and Shanghai as well as several second- and third-tier cities — unveiled tighter measures to restrict housing purchases and cool the property market, in response to escalating housing prices in those areas.
In addition to the turbulent environment, Vanke remains troubled by a shareholding issue that began in 2015.
Zhu Xu said the company is finalizing a plan to reelect its board of directors. The current board will continue to fulfill its duties in the meantime, even after its term expires on March 28.
rise in China Vanke Co’s profit attributable to equity shareholders in 2016